Miscellaneous 2 Flashcards
option limited for LTC rider, not available as stand-alone LTC policy
allowing only one elimination period option
to be a tax qualified plan, it must follow:
HIPAA minimum benefit eligibility standards
Definition of Occupation
“only occ” v “own occ”
- “own occ” results in more injuries being considered disabilities
- many policies provide for a limited period of “own occ” (such as 2 years), with “any occ” definition applying thereafter
ways ACA reformed MA program
- significant downward pressure on payment rates
- plans receive bonus payments based on quality ratings
- minimum MLR of 85% began in 2014
- coverage gap for Part D benefits will be closed gradually over several years
True or False
MA bids are community-rated
true - premiums don’t vary by member
Enrollment periods for MA-PD
- initial enrollment period - first eligible
- annual open enrollment
- 10/5 - 12/7 - special enrollment
- change of residence
- loss of current coverage
Medicare Supplement Plans
- useful to fill the gap between Part A & Part B coverage
- standardized options with different coverages
Use of limited benefit plans
- Supplement major-medical plans
- Hospital indemnity plan
- dread disease/ critical illness
limited benefit plans (definition)
Medical plans that don’t meet the definition of major medical
interest assumption in group LTC insurance is used for:
- investment income on the assets that support the reserves
- discount value in present value calculations
- calculate statutory reserves
True or False
experience rating is used for group LTC
False
prospective - unusual
retrospective - some contracts require portion of favorable experience be returned through improved benefits or lower premium
group & Ind LTC are both rated with level premiums based on:
the insured’s age when the policy is issued
True or False
group LTC insurance is fully underwritten
False
typically guaranteed issue for active employees
True or False
Group LTC coverage is offered on an accept/ decline basis only with no rated coverage option for sub-standard risk
True
individual market may offer reduced coverage for substandard risk
LTC participation rates driven by
- demographics
- employer support & advocacy for the plan
- simplicity & affordability of the plan
- effectiveness of the educational & marketing campaign
2 sale parts of group LTC insurance
- selection of LTC insurer or administrator by plan sponsor
2. execution of education/ marketing campaign to convince the sponsor’s employees to enroll
study on Canadian Group LTD termination experience caveats
- different management practices
- economic peaks & troughs throughout time period
- deaths may not be well identified due to purpose of study
self-funded insurance
company pays it employees claims, assumes the risk, may get reinsurance
can hire TPA to manage
ASO plan
Administrative Services Only
-used by self-insuring companies
types of group permanent life insurance
- single premium group paid-up life insurance
- group ordinary life insurance
- group term & paid up plans
Rebates are typically negotiated as a % of _____
WAC (wholesale acquisition costs)
if pharmacies buy drugs directly from the manufacturer, AAC =
AMP
Actual Acquisition Cost = Average Manufacturer Price
Key goals when creating a formulary
- adequate coverage
- marketability
- cost control
considerations for Rx pricing when developing premium
- Timing of rebates
- Credibility
- Integrated plans
- Fixed cost leveraging
When applying copays to determine the plan’s liability, the ______ copay should be used
effective
effective copay
average copay paid
nominal copay
value stated in plan design
“normalized” script counts
scrips that are filled for multiple months are normalized to a monthly basis
actuarial values for stand alone dental plans
70% - low plans
85% - high plans
usual, customary, and reasonable (UCR)
fee that is the lowest of provider’s usual fee for the service, the customary fee in the geographic area, and the reasonable fee based on the circumstance
final benefit cost
= gross benefit cost - member cost sharing
value of copay (member-cost sharing)
= annual frequency * copay amount / 12
gross benefit PMPM
= annual frequency * avg cost per service / 12
value of the deductible
= total claim cost - claim cost exceeding the deductible
claim cost exceeding the deductible
= accumulated annual cost - accumulated frequency * deductible
private exchanges - enrollees choose plans with higher cost sharing & lower premiums
2 reasons why
- no cross-subsidization
- member selection is built into rate - employers used defined contribution approach
- the additional cost of a richer plan is not supported
cost impacts via the private exchange
- carrier best in class pricing
- increased carrier competition
- items increasing costs (relative to self-funded insurance - exchange operator will charge to run the exchange)
most distinct differences between private exchange models
- carrier approach
a. single carrier vs multi-carrier - funding methodology
a. self funded vs fully insured
MEWA
Multiple Employer Welfare Arrangements
Canadian LTD does not limit benefit for “_______” conditions to 24 months
Mental & Nervous
actuarial cost method for retiree benefits should meet the following criteria:
- the period over which normal costs are allocated for an employee should begin no earlier than the date of employment & should not extend beyond last assumed retirement age
- attribution of normal costs should bear a reasonable relationship to the plan’s benefit formula or the employee’s compensation or service
- expenses should be considered when assigning periodic costs or contribution to time periods
- sum (accrued liability) & actuarial PV of future normal costs should = actuarial PV of projected benefits & expenses
purpose of ASOP #6
guidance to actuaries when measuring retiree group benefit obligations
